SLR Investment Corp. Reports Solid Q3 Earnings with Net Investment Income Growth
Net Investment Income rose to $23.4 million, or $0.43 per share in Q3 2023.
Declared quarterly distribution of $0.41 per share, with a stable NAV of $18.06.
Comprehensive Investment Portfolio fair value reached $3.1 billion with 790 unique issuers.
Net debt-to-equity ratio stood at 1.21x, within the target range.
On November 7, 2023, SLR Investment Corp (NASDAQ:SLRC) disclosed its financial results for the quarter ended September 30, 2023, showcasing a robust net investment income of $23.4 million, or $0.43 per share. This performance marks a significant year-over-year increase, with net investment income growing by 16%. The company's net asset value (NAV) per share also saw a slight uptick, reaching $18.06 from the previous quarter's $17.98.
Financial Highlights and Portfolio Activity
SLRC's comprehensive investment portfolio, valued at a fair $3.1 billion, is diversified across approximately 790 unique issuers in over 110 industries. The portfolio's fair value is primarily concentrated in senior secured loans, with 97.8% in first lien senior secured loans. During the quarter, SLRC made new investments totaling $346.3 million and saw repayments and sales of $306.8 million, leading to a net portfolio activity of $39.5 million.
Income Statement and Balance Sheet Overview
The company reported a net increase in net assets from operations of $26.9 million, translating to earnings per share of $0.49. Gross investment income for the quarter was $59.6 million, a notable rise from the $47.6 million reported in the same quarter of the previous year. This increase was attributed to the growth of the income-producing portfolio and a rise in index rates.
SLRC's expenses for the quarter amounted to $36.3 million, compared to $27.5 million in the prior year's quarter. The rise in expenses was primarily due to higher management fees, incentive fees, and interest expenses associated with a larger portfolio, as well as increased index rates on borrowings.
Portfolio Quality and Liquidity
The company emphasized its strong portfolio credit quality, with 99.7% of the portfolio performing on a fair value basis and 99.3% on a cost basis. SLRC's net debt-to-equity ratio was 1.21x, which is within the targeted range of 0.9x to 1.25x. The company also reported having approximately $600 million of available capital to capitalize on the current investment environment.
SLRC's Board declared a quarterly distribution of $0.41 per share, payable on December 28, 2023, to shareholders of record as of December 14, 2023. The company has transitioned back to quarterly distributions from monthly distributions, starting with the fourth quarter of 2023.
Outlook and Future Prospects
Co-CEOs Michael Gross and Bruce Spohler expressed satisfaction with the company's performance, highlighting the strength of the credit quality and the strategic growth of the portfolio. They anticipate that the investments made will prove to be an attractive vintage, especially in sponsor finance.
SLRC remains focused on leveraging its expertise in niche markets and continues to invest in leveraged, U.S. upper middle market companies through various forms of senior secured loans. The company's financial stability and strategic investments position it well for future growth and value creation for its shareholders.
For more detailed information about SLR Investment Corp.'s financial results, interested parties can access the earnings conference call and webcast, or visit the company's website at www.slrinvestmentcorp.com.
Explore the complete 8-K earnings release (here) from SLR Investment Corp for further details.
This article first appeared on GuruFocus.
